Justia White Collar Crime Opinion Summaries

Defendant, once a practicing psychiatrist, defrauded Medicare by receiving funds he was not entitled to receive and then fled the country to live as a fugitive in the Philippines. There, defendant created the website www.liver4you.org, fraudulently promising to provide critically ill patients liver or kidney transplants for certain sums of money. Defendant was subsequently convicted of one count of health care fraud and five counts of wire fraud. Defendant appealed, arguing that the district court committed four procedural errors in calculating defendant's offense level and imposed a substantively unreasonable sentence. The government argued that the court should not consider the four procedural errors because at sentencing the district court stated it would impose "the same sentence" even without some of the alleged errors. The court rejected this contention and emphasized that such predictions were only rarely appropriate. Defendant argued that his website was not mass-marketing pursuant to U.S.S.G. 2B1.1(b)(2)(A)(ii) because he did not initiate contact with his victims where they found his website, which was publicly available online, and emailed him at an address listed on the website. The court rejected defendant's distinction and held that he committed fraud by using the internet to solicit a large number of persons to buy his organ transplant services. Therefore, the court held that the enhancement applied even if defendant did not use the most active marketing method possible. Accordingly, the court affirmed the judgment of the district court.

This criminal appeal arose from a "finite reinsurance" transaction between American International Group, Inc. (AIG) and General Reinsurance Corporation (Gen Re). Defendants, four executives of Gen Re and one of AIG, appealed from judgments convicting them of conspiracy, mail fraud, securities fraud, and making false statements to the Securities and Exchange Commission. Defendants appealed on a variety of grounds, some in common and others specific to each defendant, ranging from evidentiary challenges to serious allegations of widespread prosecutorial misconduct. Most of the arguments were without merit, but defendants' convictions must be vacated because the district court abused its discretion by admitting the stock-price data and issued a jury instruction that directed the verdict on causation.

In 2009, Appellant Shawn Merriman approached an "otherwise unsuspecting US Attorney's Office" and disclosed that he had engaged in a long-running Ponzi scheme that defrauded investors of over $20 million. At the time of his disclosure, Appellant had offered several million dollars' worth of assets to the government so that it could liquidate them and eventually remit the proceeds to Appellant's victims. Appellant cooperated with authorities throughout the proceedings and ultimately pled guilty to one could each of mail fraud and forfeiture. Appellant appealed two of the district court's sentencing decisions, arguing: (1) the district court should have counted the assets Appellant initially turned over as a 'credit' against his victims' measured aggregate loss; and (2) the court erred by finding he occupied a 'position of trust' for a two-point enhancement. Because Appellant did not challenge the substantive reasonableness of the district court's sentence, the Tenth Circuit reviewed the case on appeal for procedural reasonableness. Finding no clear error in the district court's sentence calculation, the Tenth Circuit affirmed the lower court's sentence.

Defendant was convicted of six counts of bank fraud and sentenced to 80 months imprisonment where defendant recruited other individuals to cash counterfeit checks. At issue was whether the district court erred by applying a two-level increase for possession or use of any device-making equipment or the production of trafficking of any unauthorized access device or counterfeit device under U.S.S.G. 2B1.1(b)(1) and a three-level increase for his aggravating role as a manager or supervisor under U.S.S.G. 3B1.1(b). The government conceded that the district court erred in applying the section 2B1.1(b)(1) enhancement where the enhancement could not be applied to offenses that involved a transfer originated solely by paper instrument. Therefore, the court held that the district court erred in applying the section 2B1.1(b)(1) enhancement. The court held, however, that the district court properly applied the aggravating role enhancement under section 3B1.1(b) where the recruited individuals knew or were willfully blind to the fraud. Accordingly, the court affirmed in part and reversed in part, remanding for resentencing.

Defendant pled guilty to one count of identity theft as part of a plea agreement where defendant had treated hundreds of patients while falsely representing that he was a licensed physician. In determining defendant's sentence, the district court increased his sentence under U.S.S.G. 3A1.1(b)(1) because some of his patients were children with serious mental health conditions. On appeal, defendant disputed the increase in his offense level, contending that section 3A1.1(b)(1)'s 2-level adjustment for vulnerable victims applied only to victims of defendant's offense of conviction, who in this case would include only those victims who suffered financial loss. The court disagreed and held that the adjustment applied not only to victims of the offense of conviction, but also to victims of defendant's relevant conduct. Accordingly, the court affirmed the judgment of the district court.

Defendant was convicted of failing to account for and pay employment taxes under 26 U.S.C. 7202, sentenced to 48 months imprisonment and fined $75,000. Defendant appealed his conviction, the calculation of loss to the government, and his fine. The court held that the district court did not err under Federal Rule of Evidence 404(b) in admitting evidence relating to defendant's compliance with Minnesota tax law. The court held however, that the district court made insufficient findings to conclude that defendant had violated section 7206(2). Accordingly, the court vacated the calculation of loss and remanded for resentencing on the existing record. Because the court remanded for resentencing, it did not reach defendant's remaining arguments.

Defendant, pro se, was convicted of 129 counts of unlawfully dispensing certain controlled substances by means of written prescriptions and sentenced to concurrent terms of imprisonment totaling 97 months and fined $200,000. At issue was whether the district court effectively denied defendant his right to testify. The court held that in these circumstances, where the district court initiated a colloquy with defendant regarding his right to testify, the district court was duty-bound to correct a pro se defendant's obvious misunderstanding of his right to testify. The court also held that the error was not harmless and therefore, the court vacated defendant's convictions and remanded.

Appellee alleged that six U.S. Postal Inspectors wrongly caused him to be criminally prosecuted in retaliation for his public criticism of the United States Postal Service (USPS) and its personnel. The Postal Inspectors appealed the district court's qualified immunity, on appellee's claim of retaliatory inducement to prosecution in violation of his right to free speech under the First Amendment. Insofar as the appeal challenged the district court's determination that there were genuine issues of material fact, the court dismissed it for lack of jurisdiction. Insofar as the district court declined to find the Postal Inspectors protected by qualified immunity based on "arguable probable cause," the court affirmed. Accordingly, the court remanded to the district court for trial on the merits.

Petitioners appealed from a Memorandum and Order and Final Order of Forfeiture entered by the district court dismissing their petition for an ancillary hearing and rejecting their claim as beneficiaries of a putative constructive trust in defendant's forfeiture assets. At issue was whether the remission provision of 21 U.S.C. 853(i) precluded the imposition of a constructive trust in petitioners' favor and whether imposing a constructive trust would be consistent with a forfeiture statutory scheme provided by section 853. Because the court concluded that section 853(i) did not preclude, as a matter of law, recognizing a constructive trust and because a constructive trust was not inconsistent with the forfeiture statute, the court vacated the Final Order of Forfeiture and remanded the case to the district court to consider whether, pursuant to Vermont law, a constructive trust should be recognized in favor of petitioners.

Appellant, who was the Executive Director of the Poverty Point Reservoir District (PPRD), was convicted of extortion in violation of the Hobbs Act, 18 U.S.C. 1951, and sentenced to 18 months imprisonment where appellant used his position to coerce an independent contractor, who performed maintenance services for PPRD, into performing a myriad of jobs at appellant's home and farm while paying him with PPRD funds. At issue was whether the proof presented at trial constituted a constructive amendment of the government's indictment and whether the evidence was insufficient to show that appellant obtained property within the meaning of the Hobbs Act. The court held that there was no fatal variance between the indictment and the proof presented at trial where the government presented a single, consistent theory of conviction. While the independent contractor's labor was the only property relevant to the element of extortion, appellant's appropriation of both forms of property, the use of PPRD's funds and appropriation of the independent contractor's labor, was part of a single scheme. The court also held that the compensation paid to the independent contractor for his labor did not preclude a finding that appellant "obtained" property within the meaning of the Hobbs Act. Therefore, the evidence was sufficient to support the jury's verdict. Accordingly, appellant's conviction was affirmed.